TIME WARNER SELLS BOOK GROUP TO LAGARDERE

Deal Comes One Day Before Corporate Raider Icahn Presents His Plan

NEW YORK (AdAge.com) -- Time Warner said today that it had reached a deal to sell its Time Warner Book Group to Lagardere, the French media and technology company, for $537.5 million.

Investors and business partners observe everything Time Warner does these days in view of its escalating conflict with corporate raider Carl Icahn. Mr. Icahn plans to detail how he thinks the company should increase its value, possibly through spinning off some units, in a presentation tomorrow.

So the immediate question presents itself: Does this deal take some of the Icahn-produced heat off Time Warner? And the immediate answer is: Wait until tomorrow.

Too early to tell
“It’s way too early to tell,” said Richard Greenfield, managing director, media analyst, Pali Research. “We need to see what Icahn says he wants in his presentation Tuesday.”

No one will claim, at least, that Time Warner sought a deal solely in response to any outside pressure. It tried to sell the book unit three years ago in a bid to reduce debt, but did not receive offers in the $300 million to $400 million range that it had anticipated.

The company has also parted with other big assets in recent years. It sold off the Warner Music Group in 2003.

Trouble for Time Inc.
The sale announced today may even make it harder to meet goals at the Time Inc. division, which houses the book group. Time Inc. posted $5.8 billion in revenue last year for a 5% increase that was driven in no small part by the Time Warner Book Group.

Among its many properties, Lagardere owns Hachette Filipacchi Media U.S., the publisher of magazines like Elle, Premiere and Road & Track.